MARKETING CONCEPTS

 There are FIVE competing concepts under which

organizations conduct their marketing activities:

 The Production Concept

 The Product Concept
 The Selling Concept
 The Marketing Concept
 The Societal Marketing Concept
 THE PRODUCTION CONCEPT

 Consumers will favour those products that

are widely available and low in cost.

 Therefore increase production and cut

down costs.

 And build profit through volume.

 (1) THE PRODUCTION CONCEPT

Production Concept

Company

Produce more & more

Produce Consumers
Sell
Practically sells itself
 THE PRODUCT CONCEPT

 Consumers will favour those products that

offer the most quality, performance, or
innovative features.
 Therefore, improve quality, performance
and features.
 This would lead to increased sales and
profits.
 (2) THE PRODUCT CONCEPT

 Product Concept
Produce Practically sells itself,if
Quality it gives most quality
Products for money
Consumers
Sell

Buyers admire well-made products and can

appraise product quality and performance.
 THE SELLING CONCEPT

 Consumers , if left alone , will not buy

enough of company’s products.

 Therefore, promote sales aggressively.

 And,build profit through quick turnover.

 (3) SELLING CONCEPT

 Consumers have normal tendency to resist.

Aggressive selling &

Produce promotion efforts

Sell it Consumers

Making sales becomes primary function and

consumer satisfaction secondary .
 THE MARKETING CONCEPT

 The key to achieving organizational goals

consist in determining the needs and wants
of target markets and delivering the desired
satisfactions more effectively and efficiently
than competitors.
 And build profit through customer
satisfaction and loyalty.
 (4) MARKETING CONCEPT

 “ LOVE THE CUSTOMER , NOT THE

PRODUCT ”

Learn what they

want(MR) Produce it
Consumers
Market it

Sell what they want(Satisfy

needs of customers)
 (5) THE SOCIETAL MARKETING CONCEPT

 It is Marketing Concept (+) Society’s well being.

 Balancing of following three considerations while

setting marketing policies :

-Customer’s want satisfaction

-Society’s well being
-Company’s profits
 Strategic Marketing Mix

The marketing mix is probably the most famous marketing

term. Also known as the Four P's, the marketing mix elements
are:
Pricing Strategies:
 Place

“A channel of distribution comprises a set of

institutions which perform all of the activities
utilized to move a product and its title from
production to consumption”

Bucklin - Theory of Distribution Channel Structure

(1966)
Place
 Product
Product Life Cycle
 Product
1) Introduction.
 The product is promoted to create awareness.

 The product has no or few competitors, & a

skimming price strategy is employed.
 Limited numbers of product are available in

few channels of distribution.

 Product
2) Growth.
 Competitors are attracted into the market

with very similar offerings.

 Products become more profitable.

 Advertising spend is high and focuses upon

building brand.
 Market share tends to be stabilized.
 Product
 3) Maturity
 Producers attempt to differentiate products and
brands are key to this.
 Price wars and intense competition occur.
 Producers begin to leave the market due to
poor margins.
 Promotion becomes more widespread and use
a greater variety of media.
 Product
4) Decline
 Declining happens either because more

innovative products are introduced or

consumer tastes have changed.
 There is intense price-cutting and many more

products are withdrawn from the market

 Promotion

Promotion Mix MEANS Advertising

 Promotion
 The elements of the promotions mix are:
 Personal Selling
 Personal Selling is an effective way to manage
personal customer relationships.
 sales people are very expensive and should
only be used where there is a genuine return
on investment.
 The sales person acts on behalf of the
organization.
 Sales Promotion
 Sales promotion tend to be thought of as being
all promotions apart from advertising.
 BOGOF promotion, or Buy One Get One Free.
Others include couponing, money-off
promotions, free accessories.
 Each sales promotion should be carefully
costed and compared with the next best
alternative.
 Public Relations (PR)
 Public Relations is defined as 'the deliberate,
planned and sustained effort to establish and
maintain mutual understanding between an
organization and its publics'
 It is relatively cheap, but certainly not cheap.
 Successful strategies tend to be long-term and
plan for all eventualities.
 Direct Mail
 Direct mail is very highly focused upon
targeting consumers based upon a database.
 The potential consumer is 'defined' based upon
a series of attributes and similarities.
 Direct mail is TWO WAYS communication
not just a one way
 Trade Fairs and Exhibitions
 Such approaches are very good for making
new contacts and renewing old ones.
 The purpose is to increase awareness and to
encourage trial.
 They offer the opportunity for companies to
meet with both the trade and the consumer.
 Advertising
 Advertising is a 'paid for' communication.
 It is used to develop attitudes, create awareness,

and transmit information in order to gain a

response from the target market.
 There are many advertising 'media' such as

newspapers (local, national, free, trade),

magazines and journals, television (local,
national, terrestrial, satellite) cinema, outdoor
advertising (such as posters, bus sides).
 Sponsorship
 Sponsorship is where an organization pays to
be associated with a particular event, cause or
image.
 The attributes of the event are then associated
with the sponsoring organization.
 What is Market Segmentation?

 Process of dividing a potential market into

distinct subsets of consumers with common
needs or characteristics.

 Separating a heterogeneous market into

smaller homogeneous units.
The Segmentation Needs-Based
Segmentation
Process
Segment
Identification

Segment
Attractiveness

Segment Positioning
Strategy

Positioning
“Acid” Test

Strategy
Implementation
 Segmentation Bases

 Geographic  Demographic
 Country  Age
 Region  Sex
 County size  Education
 SMSA population  Occupation
 Density  Race
 Family life cycle
 Segmentation Bases
 Psychographic
 Social class
 Personality
 Lifestyle
 Activities, interests, &
opinions (AIO’s)
 Behavioralistic
 Decision unit
 Usage rate
 Readiness
 Benefits sought
 Occasion
 Brand loyalty
 Market Attractiveness
 Market attractiveness represents the degree of
market opportunity offered by a market
segment and the ability of the firm to meet the
segment’s needs within a competitive setting.

 Determining market attractiveness is a four-

step process.
 Determining Market
Attractiveness...
 First, pre-select criteria that will be used to
evaluate market attractiveness and competitive
position.
 Market Attractiveness Factors
 Market/customer
 Size ($’s, units)
 Market potential
 Market growth rate
 Product life cycle stage
 Differentiation potential
 Customer loyalty
 Price elasticity
 Economic/technological
 Investment intensity
 Industry capacity
 Level & maturity of
technology utilization
 Ability to pass through
inflation effects
 Barriers to entry/exit
 Access to raw materials
 Market Attractiveness Factors
 Competitive  Environmental
 Industry structure  Regulatory climate
 Competitive groupings  Degree of social
 Substitution threats acceptance
 Perceived differentiation
among competitors
 Individual competitors’
strengths
 Competitive Position Factors
 Market Position  Economic/technological
 Relative market share  Relative cost position
 Rate of change in share  Capacity utilization
 Perceived actual or  Technological position
potential differentiation  Patented technology
 Breadth of current or
planned product line
 Company image
 Competitive Position Factors

 Capabilities  Capabilities, con’t

 Management strength &  Distribution system
depth  Labor relations
 Financial  Relations with regulators
 R&D/product development
 Manufacturing  Interactions with other
 Marketing segments
 Salesforce  Market synergies
 Operating synergies
 Determining Market
Attractiveness (continued)...
 Second, weight the market attractiveness and
competitive position factors.
 What is the relative importance of each factor to
your firm?

 Third, rate each segment on attractiveness and

competitive position.
 Determining Market
Attractiveness (continued)...

 Fourth, evaluate the implications of alternative

positions within the market
attractiveness/competitive position matrix for
target market selection, strategic objectives,
and resource allocation.
 Select segment(s) that offer best opportunity for
profits.
 Positioning
 Match offerings of firm to the needs and wants of
market segments.

 Effective positioning involves understanding

customers’ perceptions about both the psychological
and physical characteristics of offerings.

 Positioning starts with a product. But positioning is

not what you do to a product—it’s what you do to the
mind of the customer. That is, you position the
product in the mind of the customer.
 Positioning Strategy
 Learn the customer’s viewpoint. Create
positioning statement based on unique
customer needs.
Primary Needs

Articulated Needs

Exciting Needs
 Positioning Statements
 To communicate positioning, a marketing plan
should include a positioning statement
following the form:
“To (target group and need) our (brand) is
(concept) that (point of difference).”
 Example:
“To young, active soft-drink consumers who
have little time for sleep, Mountain Dew is the
soft drink that gives you more energy than any
other brand because it has the highest level of
caffeine. With Mountain Dew, you can stay
alert and keep going even when you haven’t
been able to get a good night’s sleep.”
 Points to Remember About
Positioning:
 Based on consumer perceptions of tangible
and intangible characteristics of offering.

 The intensity of the brand will affect

positioning.